Shares of Tesla fell sharply for a second straight day, falling 12% on Tuesday, in a constant shake after the company’s founder Elon Musk suggested on Twitter that he would sell 10% of his shares. his part at Tesla.
Tuesday’s loss sent the stock down more than 16% this week, nearly wiping out the streak of gains it has seen in the two weeks after Tesla’s market value exceeded $1 trillion for the first time. Since the close of Friday, Tesla has shed about $200 billion in market valuation, though it remained above the $1 trillion threshold at the close of trading on Tuesday.
On Saturday, Mr. Musk posted A Twitter poll asked if he should sell some of his Tesla stock, saying he would “follow the results of this poll, whichever way it plays out”. About 58 percent of respondents voted for him to sell the shares.
Musk owns 17% of Tesla shares, a stake worth about $200 billion at the time he tweeted the poll. His weekend tweets were pledging to sell about $20 billion in stock.
As Stephen Gandel reports for The New York Times’s DealBook, Musk may soon need to sell a large chunk of his stock. That’s because Mr. Musk holds nearly 23 million stock options that have been awarded and are due to expire in August 2022.
Most stock grants allow executives to avoid paying taxes for years, and perhaps forever, as long as they don’t sell the stock they gain from the option conversion. But the structure of Mr. Musk’s options means they may not fully qualify for tax incentives, and he could owe more than $10 billion in taxes.
Separately, on Monday, Mr Musk’s brother, Kimbal Musk, revealed in a regulatory filing that he sold about $109 million worth of Tesla stock on Friday.
Here’s what else is happening in the market:
The S&P 500 index fell 0.4 percent, its first daily drop in eight straight days of gains.
Oil prices spiked, with West Texas Intermediate crude rising 2.7% to $84.15 a barrel.
Yields on government bonds were lower, with 10-year Treasury yields falling 5 basis points to 1.46%.